Lender Blames Economy for Response Drop in B2B Campaign
The equipment leasing and financing company began the campaign 10 months ago, sending 22,000 pieces monthly to owners of small and midsize businesses and getting a response rate of 5 percent. In the past few months the company worked to better identify its targets and reduced the monthly mailings to 15,000 to 17,000. During that time, however, the response rate dropped to 3 percent even though the mailer remained virtually the same.
"The economy is affecting everyone, and people either don't have the money to spend or they are not looking to spend any money right now," said Dan Feder, sales manager at Five Point Capital. "It will probably be this way for a while."
Despite the drop in response rate, Feder thinks that cutting back the number of mailings has paid off in other ways.
"When we got all of those responses with our first mailing, we were just reacting to the callers and didn't have time to think about what would be best for them," he said. "With fewer mailings we can give each person more attention, and it allows us to be more proactive and more efficient."
The content of the mailer has changed little over the months.
"The one thing we did was eliminate the business reply card on the mail piece," Feder said. "We used them in the first campaign and did not receive one response from them."
Now the piece only has two response mechanisms, a Web address and a toll-free number. The cost of each piece is about $1.25.
"As long as we maintain a response rate of more than 2 percent, the campaigns will continue to pay for themselves and make our money back," Feder said. "We have sales cycles that range from one week to a couple of years. But the average sales cycle is about six months."
But Five Point has adjusted the market segments it targets each month.
"By doing mailings every month, you can get a read on which industries are hot and which ones are not," Feder said. "When we started, hi-tech companies were the ones to mail to, and now it wouldn't be that beneficial to us to mail to them. With a mass mailing, you learn to adapt very quickly."
The three-fold piece opens to an 8.5-inch-by-11-inch piece of paper. At the top of the page is an account number, a credit line amount and the name of a Five Point Capital sales representative. The accompanying text alerts the recipient that his company has pre-qualified for an equipment line of credit.
The back of the mail piece describes how the user can select the equipment and negotiate the price and how a sales representative can help lay out a lease program that fits the recipient's needs, including lease length and end-of-lease buyout options.
Connected to the mailer is an identification card that looks similar to a credit card. As with a credit card, recipients must call a toll-free number to activate their Five Point Capital accounts.
"We provide them with a card because a lot of times we get calls from people who are on the road," Feder said. "This way they can contact us and we can get the process under way as soon as possible."
The piece was designed inhouse.